Ladies - take charge, don't charge

With the holidays just around the corner 1st for Women Insurance Brokers is urging women to take charge, and not charge, when hitting the shops this season.

However, 1st for Women’s managing director, Robyn Farrell, says that taking charge of spending is something that many women might find difficult given the number of credit cards the average woman carries around – and the detached way which many spend on them.

According to a recent survey of South African women* almost 20% of women have more than four credit cards. Of this, 8% actually have more than five. 22% of women have two credit cards, 26% have at least one, and only 19% don’t have any.

“Frivolous credit card spending can get you into trouble. This is something everyone with a credit card must remember over the festive season, a time when many of us might become a little impulsive,” warns Farrell.

Research in the United States showed that people who use credit cards spend about 30% more than those who use cash. Credit cards were also shown to be a primary factor in the increase in the number of personal bankruptcies and bond foreclosures.

It’s not only credit cards that are dangerous. The ready availability of credit facilities offered by retailers can also easily lead to overspending. And, many women tend to have more than just one retail store card.

Farrell concedes that with crime levels being what they are, and the threat of a smash-and-grab or handbag snatching a very big one, it is safer and more convenient to carry plastic rather than cash. Still, she says consumers should use their “plastic” wisely.

“It’s easy to lose track of what you’re spending if you aren’t physically counting out notes and handing over hard-earned cash at the teller. It is important for your own financial well-being that you keep an honest account of what you spend, and to be realistic about what you can afford to pay back if you dip into your credit,” she says.

She concludes with this advice:

• Reduce the number of credit cards you carry around to one.
• Don’t use your credit card unless you are able to pay the outstanding amount in full each month.
• Choose to pay with your debit card or cash rather than using a credit card.
• Set a budget for your festive season spending and do not spend more than that.
• Keep track of purchases by retaining invoice slips and tallying up your expenditure.
• Never buy food or other necessities on credit.